25 January 2023

Germany is isolated once more – and no one now trusts Olaf Scholz

For Europe, the German chancellor’s first year in office has been a series of broken promises and fractured relationships.

By Wolfgang Münchau

Olaf Scholz has ended his dithering over whether to send Leopard 2 tanks to Ukraine. But the German chancellor’s hesitancy has already done damage to the cohesion of the EU, the Western alliance, and Germany’s relations with eastern Europe, France and the US. Ukrainians feel once more abandoned by the Germans.

I hear people arguing that Scholz is surreptitiously supporting Russia while pretending to support Ukraine. We can never be sure what is going on in Scholz’s head. We do not know whether he is lying, follows a hidden agenda, or whether he is simply weak and inconsistent.

Assuming the worst is a reasonable reaction when actions and words do not match. What we know for sure is that he is an unreliable ally. From a German domestic perspective, the unfolding events present themselves differently. The German media acknowledges that he has a communication problem, but it doesn’t write much about Germany’s diplomatic isolation. The country has a long history of fence-sitting in international conflicts, dating back to the Cold War. This is not just a political preference. It is a business model. Scholz and his SPD are the main representatives of what I call the neo-mercantilist model – one that seeks to maximise export surpluses.

Neo-mercantilism also defines your foreign policy. Angela Merkel was the quintessential representative of the neo-mercantilist period. Her political masterstroke was to resign just when it ended. Scholz, who stands in the same tradition, is not so lucky.

Many German companies have made strategic investments in Russia, and built personal relationships with Russians. I have been told that German chief executives are leaning heavily on Scholz, and are pushing for a peace agreement between Russia and Ukraine at any price. The last thing they want is for Ukraine to win the war with the help of German weapons. They would be only too happy with a dirty deal that resets German-Russian relations to the status quo ante, and that lands them lucrative commercial deals to rebuild Ukraine. In time-honoured tradition, they want to do business with both sides, as they did in the past. The problem for them is that the German government is not powerful enough to decide the outcome of the war.

I once called the German-Russian relationship the most strategic in all of Europe – more strategic than any bilateral relationship inside the EU, including that between Germany and France. German-Russian relations have a very long history. Culturally, Berlin feels closer to Moscow than to London or Paris. The only deep political friendship Gerhard Schröder, the former German chancellor, ever struck up was with Vladimir Putin. Their families went on holiday together. Relations were less personal under Merkel, but commercial ties deepened during her long period in office, not least through the two Nord Stream gas pipelines and many bilateral deals. The St Petersburg economic forum was a Davos-style annual calendar event for the German and Russian business and policy elites. All that ended when Russia invaded Ukraine.

In response, Scholz cancelled the Nord Stream 2 pipeline and promised a new era in German security policy. But he did not deliver. Last year there were increasing reports of his office vetoing arms deliveries to Ukraine. The whole Nord Stream 2 saga has driven a wedge between Germany and eastern Europe, which is much more eager to help Ukraine. I have never seen the bilateral relations as bad as they are now.

The US is also irritated by Germany’s clumsy diplomacy. On top of this, Scholz managed to fall out with France, Germany’s most important ally in the EU.

A year ago, Scholz committed an extra pot of €100bn to defence spending to make up for underinvestment in the previous decade. Emmanuel Macron assumed this spending would help fund joint European defence projects. This was not so. Scholz decided to buy Israel’s Arrow 3 missiles for a European air defence system and US Lockheed F-35 fighter jets. Merkel agreed with Macron’s idea of European strategic autonomy from the US, though never spent any political capital on realising it. Scholz does not even pretend to be interested.

Macron’s attitude towards Germany is one of incomprehension. This is not the Germany he thought he knew. I often find that the French and Germans tend to have an idealised vision of each other. On 22 January France and Germany celebrated the 60th anniversary of the Élysée Treaty, a bilateral friendship pact. Political reality could not be more different than the self-congratulatory images from that event. It is, of course, possible that Scholz is eventually succeeded by someone ready to invest in the relationship with France, and with eastern Europe. But by then, Macron may no longer be in office.

The consequence of the Franco-German diplomatic falling out is a strengthening of nation-state politics everywhere in Europe. If France, too, turned nationalist, it would benefit Marine Le Pen. Her hostility towards the EU is matched only by her hostility towards Germany. If she were to succeed Macron as president, it isn’t hard to imagine a political alliance between right-wing governments in Europe that define themselves in their opposition to Germany.

For Germany, and the EU, this would be the next geopolitical disaster, another one they didn’t see coming. The legacy of Olaf Scholz’s first year in office is a series of broken promises and fractured relationships. Nobody trusts him any more.

[See also: Leader: What Germany gets wrong]